Lesotho Times
Mining Minister Keketso Sello holding a 911.77ct diamond.

Lesotho has a big diamond smuggling crisis: Analysts

Bereng Mpaki

THE December 2018 arrest of Mining Minister Keketso Sello’s private secretary, Refiloe Mokone, while in possession of illegal diamonds in South Africa, has rekindled lingering concerns that the country is not adequately benefiting from its natural resources in part due to rampant smuggling in the extractions industry.

Ms Mokone, who was traveling in the minister’s official vehicle, was arrested alongside three other Basotho men who are not public servants like her.  The quartet briefly appeared in the Ladybrand Magistrates’ Court where they were granted M1500 each last month. They are back in court on 31 January 2019.

While the Ministry of Mining insists that reported cases of diamond smuggling remain few and far between, several high-profile Basotho say they suspect that there is massive smuggling of diamonds going on undetected.

For instance, prominent legislator Serialong Qoo says massive smuggling is not only confined to small artisanal miners but extends to the big diamond mining firms in which the government controls statutory stakes. He says the government via its “incompetent” mines ministry has no clue what is happening at these big mines. It did not have the means or know-how to detect the theft and smuggling of any “under-declared output” at the big mines.

“I have been reliably informed by one of the few local diamond evaluators who says that diamonds are being smuggled in all the mines she has worked at in the country,” Mr Qoo said.

The Movement for Economic Change (MEC) says decisive action is needed against Minister Sello after his official car was used in illegal diamond dealings.  The fact that no action had hitherto been taken against him proves the cavalier attitude of the government in managing the country’s resources for the benefit of Basotho, the MEC’s public relations manager Napo Moshoeshoe says.

He says one has to be naive to believe that the Minister did not know that his official car was in South Africa, with his personal assistant carrying the illegal diamonds.  Unless decisive action is taken against officials, who should be the custodians of the country’s resources but were instead in the forefront of looting them, then the pilferage of the Lesotho’s natural resources will continue in earnest.

Minister Sello has denied any involvement in his assistant’s shenanigans but opposition parties and civic groups are not buying his story.

Montoeli Ramaipato from Corruption Watch Lesotho, says the country’s mineral resources are at risk because of what he calls the “poor running of the Ministry of Mines”

But Rorisang Mahlo, says there is no evidence of any rampant malpractices.

“We don’t have any previous evidence of diamond moving unlawfully across the borders of Lesotho and South Africa,” Mr Mahlo said in a recent interview.

“However, we have cases of illegal possession of rough diamonds, typically around 10 cases annually. The main hotspots being Maputsoe and Butha Buthe. You will find that most of the stones in question are fake diamonds…” he added.

Lesotho’s diamond sector has hit international headlines regularly because of its remarkable finds.  Some of its valuable finds have achieved the highest US dollar per carat rates of any kimberlite mine in the world.  Letšeng Diamonds regularly produces diamonds of outstanding size and exceptional colour and to date, Letšeng has produced five of the 20 largest rough white gem diamonds on record.

In August 2011, a 550-carat white diamond, the Letšeng Star, was recovered and is currently ranked as the 14th largest white diamond ever recorded. Other famous Letšeng diamonds include the 601-carat Lesotho Brown discovered in 1967 and the Star of Lesotho a spectacular white diamond of 123 carats, recovered in October 2004, days before the official re-opening of the mine.

Others are the 603-carat Lesotho Promise recovered in 2006, the 493-carat Letšeng Legacy discovered in 2007, the 478 carat D colour white diamond christened Light of Letšeng discovered in September 2008 and the 550-carat Letšeng Star discovered in August 2011.

Letšeng also discovered the 910-carat Lesotho Legend in January 2017 that was sold for a staggering US$40 million (M520 million) at an auction in Antwerp in Belgium in March last year.

However, despite these impressive diamond finds, Finance Minister Moeketsi Majoro has complained that the government is not getting much in both dividends and royalties.  He grumbled during the budget period last year that the government had obtained only US$3, 2 million in royalties from the sale of the Lesotho Legend.

Mining companies who have spoken on this matter in the past have equally complained that they face high production and operational costs. These had to be factored in first before the issue of dividends was considered.

Apart from the low earnings, many Basotho say they are concerned that the country appears to be losing more through pilferage as more and more stones are illegally smuggled into neighbouring South Africa for sale on a thriving black market.

Former Mines Minister Lebohang Thotanyana said smuggling of the country’s diamonds could damage Lesotho’s reputation on the international market as well as violate the provisions of the Kimberley Process Certification Scheme (KPCS) if it is not nipped in the bud.

The KPCS is the process established in 2003 by the United Nations to prevent “conflict diamonds” from entering the mainstream rough diamond market.

The process was set up “to ensure that diamond purchases were not financing violence by rebel movements and their allies seeking to undermine legitimate governments”.

Mr Thotanyana says continued smuggling of diamonds literally mocks the KPCS.

“Lesotho is party to the KPCS and when diamond smuggling is done by government officials who should be the custodians of the diamonds, it makes a mockery of the Kimberly Process and puts Lesotho in great danger of having its diamonds banned from international trade. Markets prefer diamonds that comply with the KPCS,” Mr Thotanyana told the Lesotho Times.

Mr Thotanyana said during his tenure as mines minister between 2015 and 2017 diamond smuggling had not been a huge problem as he had strengthened the Diamond and Anti-Smuggling unit of the Lesotho Mounted Police Service (LMPS).

But given the fact that Lesotho had at least 405 diamondiferous kimberlites, which made it easy for communities to come across diamonds, smuggling of the precious stones could not be ruled out. To manage this challenge, his (ousted) government had planned to recognise artisanal and small mining in the country to contribute to efforts to combat smuggling.

“We had also planned to empower people who find such diamonds to bring them to officials in exchange of compensation… We were also in the process of opening a diamond exchange in the country still to stop the problem of diamond smuggling.

“In the absence of all these initiatives, people will have no choice but to trade those diamonds they find on the black market,” Mr Thotanyana said.

He says it is vital for background checks to be conducted on ministry of mining employees to determine their fitness to hold office as they are essentially the custodians of the country’s natural resources.

He also says the government should strive to strengthen security of both the diamonds in its possession and at the mines themselves to combat smuggling. It should also equip the police’s diamond unit with more resources to do its job effectively.

Mr Qoo, the Democratic Congress (DC)’s Malingoaneng constituency legislator, insists that Lesotho’s serious diamond smuggling problem is due to its porous systems.

He says part of the reason why diamond smuggling is rife is because the government had inadequate technical representation in the mines. This, he claims, gives mine operators the leeway to under declare their recoveries.

Mr Qoo, who is also a member of the parliamentary committee on natural resources, says the committee needs to be empowered to directly oversee regulation of the mining sector and the ministry.

“At the moment, there is some resistance from certain ministry officials when we attempt to get in touch with the mining companies. You could swear there is something going on between them (the ministry officials and the mines) that they do not want us to find out.

“Just as in the case of the minister’s private secretary, our suspicion is that there is possible coordinated diamond smuggling rackets between the ministry’s officials and those at the mines.”

Mr Qoo says he is happy that the incident involving the minister’s private secretary took place because it will open the eyes of Basotho about the reality of what has been happening to their diamonds over the years.

He says Minister Sello and her secretary, Ms Mokone, must surely be both held responsible for the South African incident.

The MEC’s Napo Moshoeshoe maintains that Lesotho has a big problem on its hands if government officials who are entrusted with taking care of the country’s minerals resources are the ones plundering them.

“This (Mokone incident) is a clear indication that we have a serious problem of diamond smuggling in this country,” Mr Moshoeshoe says, adding the problem of smuggling is particularly evil  because it robs the country of taxes and royalties  needed for development.

He also believes the Mokone case  is not an isolated one because Lesotho has always harbored well known illegal diamond dealers. It is possible that MsMokone has been working with these dealers.

“She is using her position as a government employee to smuggle diamonds possibly for dealers in and outside the country.”

The Mokone incident did not augur well for Mr Sello’s standing as a competent minister who can be entrusted to safeguard the country’s natural resources, Mr Moshoeshoe charged. He must therefore go.

“It is very difficult to absolve the minister from this incident as it happened from right under his nose by someone who handles both his official and unofficial errands.

“Something must give, we cannot afford to have a similar situation repeating itself in future. We have to send out a strong statement as a country that diamond smuggling has no place here.”

Montoeli Ramaipato of Corruption Watch Lesotho asserts that  the country’s mineral resources are in danger because the entire “administration of the mining ministry is appalling”.

“The recent development involving the ministers’ aide is not surprising as the administration of the ministry leaves a lot to be desired,” Mr Ramaipato says.

Evidence of this poor administration are also exemplified in instances  in which mining rights issued under a different regime are overturned when a new government comes into office.

He says this can be seen in the manner in which past mining ministers have been hauled to the courts to answer for issues that took place during their office terms.

“This clearly means there is undue political interference in the awarding of mining licenses which also has a ripple negative effect on fostering good mining etiquette,” Mr Ramaipato says.

The result of these negative influences, he says, was the dwindling investor confidence in Lesotho’s mining sector.

He says there is no way Lesotho’s diamonds can be beneficial to its citizens when they are placed under the custody of such “an incompetent ministry”. To combat diamond smuggling, relevant laws and regulations have to be reviewed and put in place. But above all, there is an urgent need to overhaul the running of the mines ministry in general.

 

Lesotho Times

Lesotho's widely read newspaper, published every Thursday and distributed throughout the country and in some parts of South Africa.

Contact us today: News: editor@lestimes.co.ls Advertising: marketing@lestimes.co.ls Telephone: +266 2231 5356

1 comment

  • We strongly urge the Prime minister to establish a Commission of inquiry to investigate all irregularities within the mining sector in Lesotho before it is too late. We also appeal to the Kimberly Process to send a fact finding mission in Lesotho to investigate if the alleged smuggling of Lesotho diamonds has basis.

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